2. Environmental Analysis
Environmental analysis is the process of assessing
the emerging trends.
Philip Kotler
Three types of emerging trends
Fad
Trend
Mega trend
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3. Environmental Analysis
Environmental analysis involves identifying the
present and future opportunities and threats to and
from the firm’s principal constituents/
stakeholders along the dimensions pf the firm’s
economic, political, legal, technological and social
environments.
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4. Process of Environmental Analysis
Scanning
Monitoring
Forecasting
Assessment
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5. Environment Scanning
Environmental scanning involves monitoring
changes and developments in the environment that
have potential impact on the business of an
organization
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6. Methods of Scanning
Extrapolations method
History analogy
Intuitive reasoning
Scenario building
Cross impact matrix
Network methods
Model building
Delphi technique
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7. Variables Considered for Scanning
Changes in macro environment
Changes in market
Nature of competition
Customer needs
Product offerings
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8. Types of Scanning
Concentrated
Comprehensive
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9. Process of Scanning
Identify relevant forces in environment (PEST)
Determine sources of observation
Selecting scanning methods
Scan and respond to data
Events
Trends
Expectations
Issues
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10. Monitoring
It involves tracking trends and events
It is auditing of environmental influences
It includes:
Specific description of environmental trends and
events
Identification of trends and events for further
monitoring
Identification of areas of forecasting
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11. Forecasting
It is related with estimation of future situation
It focuses on what is likely to happen
It involves
Identification of key forces
Understanding of the nature of key influences and
drivers of change
Projection of future alternative paths available
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12. Assessment
It identifies key opportunities and threats
Competitive position is analyzed –
i.e. how the organizations stands in relation to
other organization competing for same resources
or consumers
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14. PEST Model
Political –legal forces
Economic forces
Socio-cultural forces
Technological forces
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15. PESTEL Model
Political factors
Economic factors
Socio- cultural factors
Environmental factors
Legal factors
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16. Porters’ Model
Competitive rivalry
Threats of Entry
The power of suppliers
The power of customers
The threat of substitute products
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17. Business Environment Analysis for
Strategic Management
Environmental analysis
Strategic choice
Strategy formulation
Strategic implementation
Strategic control
Feedback
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